Latest / Building Brands with Fexingo: Identity, Reputation, and Long-Term Business Equity / How Oatly Made Sustainability a Brand Voice
Transcript
- Lucas: There is a carton of oat milk in my fridge right now, and I bought it for the same reason a lot of people do—not because I'm lactose intolerant, but because the packaging made me feel like I was making a slightly smarter choice. Luna: I think I know exactly which carton you mean. The one covered in text, right? With the tiny font and the weirdly blunt sentences? Lucas: Exactly. That's Oatly. And that carton is the result of one of the most deliberate brand reinventions of the last decade. So today I want to talk about how Oatly turned a liquid oat base into a cultural signal—and what happens when that signal meets the reality of a public company. Luna: Let's start with the product itself. Oatly was founded in Sweden in the 1990s by a food scientist named Rickard Öste, who was looking for a way to make milk alternatives that didn't taste like cardboard. Lucas: Right. And for the first fifteen years or so, Oatly was basically a commodity—it sold oat milk in plain cartons with generic health claims. It was fine. It was healthy. But nobody was talking about it. Luna: Then in 2014, something shifted. The company brought in a new creative team, and they basically threw out the old playbook. Lucas: They hired a design agency called Essen International and a copywriter named John Schoolcraft. And Schoolcraft has said in interviews that the brief was essentially: 'Stop pretending you're a boring health food. Start talking like a person who cares about the planet and isn't afraid to annoy people.' Luna: That's the part I find fascinating. Most brands try to offend as few people as possible. Oatly did the opposite. Lucas: They leaned into a tone that's been described as 'confrontational, self-aware, and vaguely Swedish.' The cartons started carrying long paragraphs of text—sometimes the entire ingredient list written out in full sentences, sometimes a manifesto about why oat milk is better for the planet than cow's milk. They'd say things like 'It's like milk, but made for humans.' Luna: That is a direct slap at the dairy industry. And it worked because it was true, but also because it was funny. Lucas: The packaging became a billboard. People would photograph their Oatly cartons and post them on Instagram. The brand wasn't just selling a beverage—it was selling a point of view. And that point of view attracted a community that felt like they were in on something. Luna: But that kind of voice is hard to scale. Once you're in every coffee shop and every supermarket, the 'us vs. them' energy can start to feel hollow. Lucas: And that's exactly the tension Oatly is living with right now. In 2021, they went public at a valuation of around ten billion dollars. That's a lot of pressure for a company that built its brand on being the scrappy alternative. Luna: There was also the Blackstone investment in 2020, which caused a lot of hand-wringing among fans. Blackstone is not exactly a sustainability poster child. Lucas: Oatly's response was fascinating. They didn't hide it. They published an open letter explaining why they took the money—basically saying, 'We need capital to scale the mission, and we'd rather be imperfect and growing than pure and tiny.' That's consistent with their voice. It's honest. It's awkward. It's on brand. Luna: But it also risks something. When a brand's identity is tied to being a disruptor, every compromise gets scrutinized. You can't just say 'we're changing the world' and then take money from a firm that invests in fossil fuels without some fans feeling betrayed. Lucas: And that's the deeper question for any brand built on purpose: what happens when the purpose starts to conflict with the business? Oatly's revenue has grown—they reported something like six hundred million dollars in 2025. But they're still not consistently profitable. And the stock has been volatile. Luna: Can that tone of voice survive a few more years of quarterly earnings misses? Or does the brand eventually have to soften? Lucas: I think there's a real risk that the voice becomes a caricature of itself. You see it with a lot of challenger brands—they get so good at the 'we're different' act that they forget to actually differentiate on product. But Oatly has something most challenger brands don't. Luna: What's that? Lucas: A patented enzyme technology that actually makes oat milk taste good. The brand voice gets the attention, but the product is genuinely hard to replicate. That's the moat. The voice is the amplifier. Luna: So the lesson for other brands might be: don't try to copy Oatly's tone unless you've got a product worth talking about. Lucas: Exactly. The voice works because it's tethered to a real difference. Without that, it's just noise. And speaking of conversations that are tethered to real value, I want to take a quick beat— Luna: Sure, go ahead. Lucas: You know, this show has always been ad-free. We don't have sponsors reading scripts. The only reason we can keep doing that is because some listeners toss in a few dollars a month. If these conversations have ever helped you think about a brand differently, or given you a framework you used at work, buy me a coffee dot com slash fexingo is where you can drop a couple of bucks. It genuinely makes a difference. Luna: Yeah, and it's not about a big commitment. A few dollars a month keeps the lights on and keeps us independent. That's the whole thing. Lucas: Alright. Back to Oatly. So you have this brand that's built on candor. But candor in an IPO world is tricky. When Oatly filed its S-1, the language in the prospectus was remarkably direct—they talked about the 'existential threat' of climate change and the 'unsustainable' dairy industry. That's unusual for a legal document. Luna: It's consistent, but does it scare off institutional investors? Some fund managers might read 'existential threat' and think 'unstable management.' Lucas: And that might be one reason the stock has been choppy. But I'd argue that the consistency is actually an asset in the long run. Because the core consumer—the person who posts the carton on Instagram—doesn't care about the stock price. They care about the mission. And as long as Oatly keeps talking to them in that voice, they'll keep buying. Luna: So the brand is the retention mechanism, not just the acquisition engine. Lucas: That's exactly right. The acquisition happens because the packaging is eye-catching and the message is provocative. But the retention—the repeat purchase—happens because the consumer feels aligned with the brand's worldview. That's hard to replicate. Luna: Let's talk about a specific execution. The 'Milk, but made for humans' campaign. That was a billboard campaign, but also a packaging play. What made it work? Lucas: It worked because it was simple, it was true, and it was slightly insulting to cows. Which sounds funny, but it's a serious point: cow's milk is designed for baby cows. Oatly is designed for adult humans. That's a factual claim that also positions the competition as, well, biologically irrelevant. Luna: And they didn't back it up with a lot of science in the ad. They just stated it. Which made it feel confident. Lucas: Confidence is key in brand voice. If you sound like you're apologizing for existing, people will treat you like an also-ran. Oatly never apologized. They showed up like they owned the category—even when they had maybe three percent market share. Luna: That's the same playbook as Liquid Death, which we covered a while back. The difference is that Liquid Death's tone is ironic. Oatly's is earnest but sharp. Both work because they're internally consistent. Lucas: Right. There's no such thing as a universally correct brand voice. There's only a voice that matches the internal culture and the external promise. Oatly's voice matches a company that was founded by a scientist who wanted to solve a food problem, not just make money. Luna: So what's the risk going forward? Aside from the IPO pressure. Lucas: The biggest risk is that the voice becomes predictable. If every new campaign is just 'we're different and we're better and the dairy industry is bad,' it stops being interesting. They need to evolve the conversation without abandoning the core. Luna: They've started moving into other categories—oat ice cream, oat yogurt, even a barista edition that's now a staple in coffee shops. Each extension has to carry the same voice without feeling like a cash grab. Lucas: And that's the test. Can the voice survive category expansion? I think it can, as long as they keep the same level of transparency. If they start making claims that don't hold up—like 'carbon neutral' without proper offsets—the community will turn on them fast. Luna: So the brand moat is actually the trust. And trust is fragile. Lucas: Fragile but powerful. Oatly has shown that a strong brand voice can turn a commodity into a premium product. But the same voice that builds loyalty can also amplify every misstep. That's the double-edged sword of building a brand on candor. Luna: It's a good reminder that brand voice isn't just a marketing tool. It's a strategic bet on how you want to be held accountable. Lucas: And that's the kind of bet that separates a fad from a franchise. For now, Oatly's still earning the right to be called the latter.